October 28 2015

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Beer Talk

By: Olivia Mitchell, Marketing Coordinator

NBWA’s 78th Annual Convention and Trade Show was a nonstop event filled with 289 exhibitors, 23 educational seminars and 4,000 attendees. Westfalia was honored to be among the exhibitors, allowing us to interact with numerous new contacts while reconnecting with old friends.

Not only did the convention allow for great conversations, it allowed for discussion revolving around beer and the growth the industry is seeing. To kick off the first day of the convention, NBWA President and CEO Craig Purser discussed his observances of the beer industry. He highlighted the growth, commenting on how quickly breweries have popped up in the past 20 years across the country.

The craft beer boom

Consumers now have more disposable income and are flocking to the seasonal and unique flavors of the craft and premium beer sector, resulting in the growth of the industry mentioned by Purser. In fact, IBISWorld predicts that with the continued growth of this sector, the beer wholesaling industry will see revenue increase at an average annual rate of 1.6% during the next five years.

Growth is good for this industry, however with such variety in products there are major variances in consumption patterns, as well as seasonality spikes. Combined, these factors create operational difficulties such as managing inventory and optimizing space, ultimately resulting in inefficiency. Wholesalers will need to rethink their strategies to keep up with demand, while taking on additional SKUs.

The case of unbalanced SKUs

If a facility has 1,000 SKUs, and currently 200 of those account for more than 80% of their volume moving out the door, there are another 800 SKUs left taking up the remaining 20% of volume but primarily sitting in the warehouse taking up valuable space. This is not an efficient use of space and recourses.

Implementing warehouse automation, such as an automated storage and retrieval system (AS/RS) allows for better management of these “slow-moving” SKUs. Built into the design of an AS/RS is the ability to accommodate the spectrum of SKUS that a wholesaler may have. Coupling the AS/RS with a warehouse execution system (WES) will give total control over the entire facility inventory.

Beer has once again became a top choice of alcoholic beverages for American consumers. As this industry focuses on optimizing inventory controls and minimizing errors, the most promising option for wholesalers is warehouse automation.

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